A lapse causes a policy, right, or privilege to end because the person or institution that would benefit fails to live up to its terms or meet its conditions.
For example, if you have a subscription right to buy additional shares of a stock at a price below the public offering price, you must generally act before a certain date. If that date passes, your right is said to lapse.
Similarly, if you have a life insurance policy that requires you to pay annual premiums, the policy will lapse and you'll no longer be covered if you fail to pay.
Yahoo Finance - Cite This Source - This Definition
- Council of Economic Advisors (CEA), Elimination period, Nonforfeiture clause, Own-occupation policy, Waiver of premium
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